Economics, public policy, monetary policy, financial regulation, with a New Zealand perspective

Uneconomic school fairs

(This is something of a rant….but it is Saturday, and it doesn’t involve the Reserve Bank.)

Today was the annual fair at the school my daughters attend. As I understand it, the Island Bay school fairs tend to raise around $25000. I used to be quite impressed, until I thought about it and realised that it is a school of around 500 kids. So the net proceeds are perhaps $55 a child. We have two children there, so our “share” of the fundraising is perhaps $110.

We don’t usually get very involved in the fair. But I’d donated perhaps $25 of ingredients a while ago for people making preserves, sweets etc. And yesterday I made them a plate of chocolate marshmallow slice – a slightly fiddly recipe and, between ingredients and time, that probably cost at least $15. My nine year old is on the School Council and was “coerced” into manning a stall. She spent two and half hours doing that. I’m not sure how to value her time, but it isn’t zero.

And because she was on the stall and they needed parent volunteers as well, we weakened and put in half an hour or so each (getting to and fro etc made that perhaps 45 minutes each in total). How to value our time? Well, the marginal cost has to be above the average cost, and one needs to think in after-tax terms. $50 per hour seems very much towards the low end, but if we run with that, it was a donation of $75 between the two of us.

Oh, and then there was the money “wasted” at the fair – a rare concession to “pester power”, such that the kids were allowed to buy their lunches at the fair. Granting that there might have been some consumer surplus – fair lunch beats Dad’s lunch – but across three kids, there is another “donation” of $10-15.

That adds up to a contribution of $125 from our family – costed at the low end of a possible range of estimates. Had we just written a cheque for $110 to the school as an additional donation, we’d have been able to claim back a tax refund (as it would be a charitable donation) for a third of the amount. So we spent $125 to provide the school $110, even though we could have provided the same benefit to the school for perhaps $73. This can’t be an uncommon story. I might have costed our time a bit higher than the average parents would have, but this is a decile 10 school. Parental time is scarce and valuable.

And plenty of people will have put in much more time and effort than we did – the extensive advance organisation (emails at 11.11pm on Thursday night), and some people will have been there for three or four hours today alone. Oh, and the distraction from education seems quite real too – my daughter apparently spent a large chunk of yesterday at school making (very pretty) signs for her stall.

And, of course, quite a lot of the profit to the school didn’t come from parental input at all, but as donations from local businesses, which will have treated them as part of the respective business’s marketing budget.

Were there any offsetting gains to compensate for the wasted $52? Well, it was nice to see the nine year old responsibly helping run the activity (but she has other involvements outside the home). Perhaps some people get a warm fuzzy feeling from “doing something together for the community”. But this is a school. We don’t apply this funding model to the local GP or, say, the supermarket We write a cheque. As a pro-defence conservative, the old liberal line about holding cake stalls to fund the air force once annoyed me a little, but…….they make a fair point. Cake stalls to fund our education system?

Now I know that high decile schools are somewhat caught. They are funded much less well than lower decile schools, and they are not allowed to charge fees. They can ask for “donations”, and most parents pay them, but even at lower-end decile 10 areas (which is how I’d characterise Island Bay), the resistance will start to rise if the requested donation is raised too far. But the economics of the current model just don’t seem to add up. And while there are deadweight losses from taxes, from the less inefficient taxes they are not as large as the waste implied by my cost calculations above.

And that was going to be the end of the rant, until I actually went and helped out on the “catch a flamingo” game stall. I came away feeling quite uncomfortable about it. Children were being encouraged to pay $2 to toss three quoits, trying to get at least one of them over the necks of one of the several plastic flamingos pegged in the ground a couple of metres away. And the prize? A lollipop.

The Principal had been running the stall before I came on, and had made a unilateral decision to lower the price to $1. And we’d both decided that for the littler kids who missed we’d give them a lollipop anyway. But I reckon no more than one in eight of the children managed to get a quoit over a flamingo, so that in principle they were paying $8 for a lollipop. When I got home I priced lollipops – one could buy a big bag at 5 cents per lollipop and rather smaller bags at 10 cents a lollipop.

Of course, one can’t ignore the pleasure the children got from tossing a plastic ring at a plastic flamingo, but frankly it felt like a rip-off. Oh, and not to mention the sugar. I’m not a fanatic, but we never willingly allow our own children to have lollipops. But if lollipops still sell at $8, those sugar taxes the zealots argue for will have to be quite high.

I’m sure there are plenty of stalls that offer a quite reasonable deal – good baking at half or less the price one might pay in the local café, let alone Wishbone. But this wasn’t one of them. It felt a lot like exploitation frankly. Willing buyers certainly, but…..

I’ve never been convinced of the case for financial literacy education in schools. This might almost have been enough to change my mind, except that it was the school itself that was engaging the kids in such a shockingly bad deal. No teacher like experience I suppose…..

Next year, we’ll have only one child at this school. I think I’ll just write a cheque.

I’m sure this is the sort of issue Eric Crampton could find a clever academic paper about. A quick Google this morning showed up nothing, but just now I did find this old rant along similar lines from Deborah Russell.

It would be interesting to know if any other country funds their schools in quite such an inefficient way. If Andrew Little wanted to appeal to middle NZ, I suspect fully funding would be a vote winner.

Mind you, schools could also rein back their mania for purchasing quite so much expensive technology.

If I recall correctly, I think I quite liked the Labour proposal in last year’s election regarding an alternate method of funding the shortfall presently sought via donations. I thought, maybe not perfect, but it’s a start.

Seems from a secondary perspective, one of the keys is becoming the attraction of international/fee paying students – this is an interesting funding breakdown at the close of the article;

It does concern me to think our secondary schools are now also competing with one another for international students. I wonder if they (like the universities) have a budget for overseas marketing/recruitment.

My children are all at secondary school now, and to my great delight, their school doesn’t engage in endless fundraising. I just pay the school “donation” – fantastic. I’m happy, and the school is happy.

The PTA does run an excellent second hand uniform sale from which it makes some money, but that’s providing a genuine service.

Yes, the model is flawed (as so often, govts make it so). We should either allow legally enforceable fees (subject to a cap) or just fund schools properly directly. I’d probably favour the latter – although legally enforceable fees might create a stronger case for more effective school choice.

Legally enforceable fees would simply exclude poor parents from school choice surely. Many of the parents at my son’s school couldn’t afford to pay the modest contribution asked. Unless by more effective school choice you mean schools choosing their students?

I’m not convinced: after all, parents are legally required to feed, clothe, and shelter children. If there are overall income inadequacy issues, deal with those thru WFF and/or the benefit system.

But, personally, I would probably be happier with full funding from central govt (“full” not being defined to include any neighbourhood’s tastes for huge numbers of ipads per classroom.) I’m not aware of schools in the UK, Aus, or the US being funded in our odd and inefficient way. I might be missing something in the overseas experience, and if so am happy to be pointed in the right direction.

I’m not convinced either. Some people find it quite difficult, either through personal circumstances, or because of personal flaws, to feed and clothe their children. Not the children’s fault. Doesn’t sound like you ever been poor. Still I agree, there must be a better way. I would much prefer full funding myself, because I regard education as a public good.

School Fairs are one of the avenues to raise fund. My daughter goes to Mt Eden normal and we do already pay $60 plus per year. The School also has an annual Food and Wine Fair which is loads of fun and gives the non working volunteer mums some fund raising activity to work towards.

I suspect the school uniforms must be a fund raiser as well because Mt Eden Normal Primary branded polo -shirts cost $57 together with skirt/shorts another $57 which are really expensive. Not too sure why we cannot use the Warehouse equivalent skirt/shorts that sells for $15.

Can’t point to any lit off the top, but a general theory on this needs to explain also why we wind up with ‘charity race’ equilibria rather than ‘work overtime and donate to the cause followed by a parade for the donors’ thing. And it might also have to explain why university graduation ceremonies are as tedious as they are for each and every person involved. And it’ll be related to the rise of the higher-cost religious denominations in the US relative to the ones that don’t ask as much of adherents.

I think the fairs must only exist so pervasively because of “regulation” – the inability to charge compulsory fees. I’m not aware of fairs being used routinely in other countries (and when I was growing up in NZ we had perhaps 2 fairs in 12 years, both for special causes, outside the school). And as you say at Offsetting, for some people (extroverts, and perhaps the genuinely cash-poor) the involvement is a positive or at least a low-cost way to contribute. Presumably those who opt out of paying the “donation” don’t fully overlap with those who opt out of contributing through the fair.

I must have missed your graduation post when it first came out. Thinking back to mine, yes the endless procession of graduands was boring, but I think I felt positive about the “sense of occasion”, being “grown up” and all that. I suppose it was the socially conventional thing to do – and the RB used to provide paid leave for people to attend their outside-Wellington graduations – but my parents wouldn’t have been bothered if i’d chosen not to attend. Younger and more innocent days perhaps? I will have to remind myself of it when I shortly have to sit through the primary school graduation, where the Principal gives a little speech about each of graduating year 6s, of whom I will know perhaps 2 of the 80.